This week for our COPIM reading group we are turning to Osterwalder, Alexander, Yves Pigneur, and Tim Clark, Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers (Hoboken, NJ: Wiley, 2010). Part of what we are doing is thinking through the different business models that can support open publication of monographs and figuring out how to implement these on the ground. Part of that work involves understanding what a business model is, of what it consists, and how new models can be generated. Here are my very loose jottings on this.
Osterwalder et al. propose nine building blocks within a business model:
- Customer segments that are served;
- Value propositions that those customers are offered;
- The channels through which the value propositions are delivered;
- The relationships that are established with each customer segment;
- The revenue streams that result from the value propositions;
- The key resources and assets that allow the delivery of the value propositions;
- The key activities that deliver the value propositions;
- The key partnerships that deliver the value propositions;
- The cost structure that results from the business model.
It is worth devoting a little time to some of these in turn with respect to academic publishing and monographs.
Who are the customers for academic monographs? Academic publishing likes to pretend that it caters to a ‘mass market’, that is, those that ‘don’t differentiate between different Customer Segments’ (21). This is why there is such a fuss about trade-crossover monographs – those rare titles that make it in the mainstream and do have a wider audience. But these are not the vast majority of titles. Instead, most academic publishing really caters to ‘niche markets’, with ‘specific, specialized Customer Segments’ that include academic libraries and individual academics/students. Academic publishers also work in a strange economy of prestige on the author side, building a reputation that ensures supply. In this sense, there is at least one way in which we can conceptualize academic monograph publishing businesses as working with a ‘multi-sided market’ model, in which an organization serves ‘two or more interdependent Customer Segments’, even though there is a strange feedback loop here and the customer segments are not wholly divorced from one another. That said, authors and readers, even when the same people, behave differently in their different roles here, so could be treated as distinct segments.
Value propositions for OA book publishing are varied. They span many of the conditions set out by Osterwalder et al., including: newness, brand/status, price, cost reduction, accessibility, and convenience. Certainly, at the moment, there is a novelty to OA monograph publishing, even while it has been ongoing for a pretty long time now. It is true in a limited sense that the access provisions of OA monographs ‘satisfy an entirely new set of needs that customers previously didn’t perceive because there was no similar offering’ (23), even though it is just the conditions of access that have changed, not necessarily the underlying books themselves. I have already remarked on brand/status, but at present all publishers have to play this game to some extent and even ‘not playing the game’ is a type of move within the brand/status/prestige economy, as it positions such a press as a radical outsider. Certainly, OA presses offer a value proposition on price in some ways. The price of access is often zero, although the cost of providing this access is far from zero. Furthermore, there are challenges with some business models, such as BPCs, which appear to present a higher price point than did conventional monographs by dint of their cost concentration on a single point in the system. Therefore, there are difficult challenges with respect to cost reduction in the value proposition for OA monographs. Certainly, a press such as Open Book Publishers has a radically different cost model to other conventional US university presses, for instance. But the assumption that OA books will lower overall costs may be fallacious. It depends upon press practices for this to happen – and extrinsic pressures on international library budgets. Certainly, OA book publishing has strong accessibility and convenience value propositions!
The channels through which OA monograph publishing is delivered are many and varied, but also constrained by existing book publication infrastructures. Awareness of OA books and publishers remains low, although this is being driven upwards by funder mandates and a greater prevalence in general publishing discourse. Evaluation of which OA initiatives to support, which models deliver local value etc., are challenging as metrics for OA are hard to deliver well. Models such as BPCs deliver easier evaluation of value for funders and institutions as they can tie a specific unit cost to a particular output. However, this accountability rationale may actually work counter to delivering the best value for all stakeholders or even to delivering a sustainable ecosystem. At present, there is a challenge in purchasing channels for OA monographs where these are not single-shot BPCs, as traditional book publication purchasing channels are simply not well geared-up to handle this. Books are purchased through channels that treat them as commodities, rather than as services that can then be disseminated ad infinitum as a public good. COPIM WP2 is working on this! Delivery of OA monographs has also proved challenging. Although, in one sense, OA monograph delivery is dead easy – just make it available! – in others, such as library ingest and discoverability, it is much harder. COPIM is also working on this. How do stakeholders signal the availability of OA books to their local communities? After sales support is also often neglected in the OA world: it is not simply a fire-and-forget system and ongoing support for authors and readers remains key.
Different types of customer relationship imply different cost models for OA monograph publishers. Personal assistance relationships are used by high-prestige university presses to work with authors and build strong supply routes that feed their brand status. But this is highly expensive to run. Various automated services can be implemented in order to reduce workload and therefore cost overheads, but these come with a potential diminishing of personal relationships. New, not-for-profit OA presses – and existing mission-driven university presses – have done a good job of defining their relationship with customers in terms of communities and co-creation. This is certainly an area where COPIM’s work on community governance comes in.
It is interesting that, in Osterwalder et al., there are a limited number of classical revenue stream options: asset sale, usage fee, subscription fees, lending/rental/leasing, licensing, brokerage fees, and advertising (35). We are preparing an update on/to Ferwerda, Eelco, Frances Pinter, and Niels Stern, A Landscape Study On Open Access And Monographs: Policies, Funding And Publishing In Eight European Countries (Zenodo, 1 August 2017) <https://doi.org/10.5281/ZENODO.815932> that gives a full breakdown of business models for the publication of OA books, where they are in use, and what they look like in practice (SWOT).
If we turn to key partnerships, Osterwalder et al. offer a useful set of rationales for partnerships that include: optimization and economy of scale, reduction of risk and uncertainty, and acquisition of particular resources and activities. The types of partnerships that they envisage are of a buyer-supplier type relationship. However, interestingly, partnerships can exist in the scholarly publishing world that are not simply monetary in exchange value, but could be labour functions distributed between different organizations, such as the White Rose Press in the UK.
It was interesting to see the way that Osterwalder et al. break down their costs as I believe the contrast between cost-driven and value-driven propositions accounts for different attitudes towards how presses should behave in the OA space. This links to the earlier comments on customer relationships. One of the greatest costs in the US university press model consists of acquisitions teams and building personal relationships with authors. This is what Osterwalder et al. would call a ‘premium value proposition’. The danger for new OA offerings is that, in contrast to this, to meet demands from OA advocates and others who see declining library budgets that OA should be cheaper, they operate on a cost-driven model that focus on minimizing such costs. This risks creating a two-tier system if we are not careful. Cost structures in Osterwalder et al. are also broken down into various types: fixed costs, variable costs, economies of scale, and economies of scope. I have often highlighted that some revenue models, such as unit-driven BPCs, treat what should be thought of as publishing infrastructure as though all costs inhere in unit chunks, rather than being fixed (salaries etc.)
One final note from the reading in this week. A later part of the book turns to free as a business model. Here it is noted that ‘non-paying customers are financed by another part of the business model or by another Customer Segment’ (89). Yet, there’s an interesting point here that, in the conventional academic book publishing market, for many actors who direct purchasing (academics), this already seems to be the case. That is, academics decide what books they need, and the academic library conducts the purchasing. Also, publication is made free under conventional purchasing logic because academic libraries elsewhere have already agreed (or will agree) to pay for it. I would suggest that successful models for OA need to keep the same invisibilising cost structure, in some ways, if they are to gain major traction.
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